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Aviva remains a 'work in progress', says Hargreaves Lansdown

Hargreaves Lansdown Stockbrokers has hailed the recovery story at Aviva, but has said that the market is likely to maintain a cautious stance on the insurance firm's stock following its recent rally.

"Aviva's recovery continues apace, buoyed in particular by a strong showing from the European and Asian regions," said Richard Hunter, Head of Equities at Hargreaves Lansdown Stockbrokers, following the insurer's first-quarter update on Thursday.

He said that the 13% growth in value of new business during the period was strong, while there remains a continued focus on both costs and the overall group simplification.

Meanwhile, and despite a mixed performance regionally, the company's longer-term prospects remain intact "as an ageing population is increasingly responsible for its own retirement welfare".

"Nonetheless, Aviva has already covered much ground since the disappointments of recent years and the share price, up 64% over the last year as compared to a 3% hike for the wider FTSE 100, has reacted accordingly," Hunter said.

"The company remains a work in progress - even though there is light at the end of the tunnel - and the general market view of the shares as a cautious buy is likely to remain intact following this update."

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